At the end of June, the Congressional Budget Office (CBO) released what many have called an alarming picture of our financial health. From the analysis, the CBO projects that government spending as a share of the economy will double by 2043, up from its historical average of roughly 20%. The long-term budget outlook continues to worsen with each passing year Congress fails to act. Debt held by the public will eclipse the size of the entire US economy by the year 2023.
Healthcare role? CBO projects that if current laws do not change, federal spending on major mandatory health care programs will grow from roughly 5 percent of GDP today to about 10 percent in 2035 and will continue to increase thereafter. Those projections include all of the effects of the recently enacted health care legislation, which is expected to increase federal spending in the next 10 years and for most of the following decade.
The Government launched its HealthGov website. The look and feel is very consumer friendly. It underscores the government’s desire to market the new healthcare plan and its benefits. I applaud efforts to bring information to consumers about choices. On the flip side, one can become cynical after reading the CBO report highlighted above compared to the rosy picture painted on the website.
The big political news was that Dr. Donald Berwick’s nomination to head the Center for Medicare and Medicaid by-passed the Senate confirmation process through a recess appointment. It just underscores how tense the implementation process is for healthcare legislation… summer is not the only thing bringing heat to DC. I wrote about his appointment in my June 7th blog.
From a legislative impact perspective, we have now entered the period of “temporary” high-risk exchanges until permanent exchanges are in place in 2014. Under the new law, people who have been denied coverage due to a pre-existing condition and who have been uninsured for at least six months may qualify to buy insurance.
Maine became the first state to ask for a reprieve from the medical-loss ratio of 85% mandated by legislation. Again this underscores the immensity of the negotiations and discussions going on, especially amongst the federal government, the states and insurance companies.
From across the seas, the new UK government just announced the biggest changes to the National Health Service (NHS) since its founding. They are in many ways breaking up how the NHS functions with the hope of reducing bureaucracy and management layers and giving consumers more choices. It is a call for decentralization. These are incredibly interesting times to see how different countries are approaching similar financial challenges.
I just finished reading my June Health Affairs as the July issue arrived on my doorstep. It is my “academic” resource into the world of health policy. June’s issue focused 100% on reform. I’d summarize the thirty-plus papers as a picture of optimism and historical opportunity interspersed with pessimism and warnings of naïveté. Many authors underscored that the current political landscape will make an already challenging implementation all the more difficult, an issue all sides clearly understand. It underscores to me that the process used in developing reform legislation is having a material impact beyond the legislative process.
The takeaways? We are moving into August when Congress will recess and we’ll see the 2010 election campaigns heating up. My tip for fellow readers is to look to candidates who are willing to talk in concrete terms about the challenges we face and solutions to those challenges. I also encourage people to spend time focusing on state elections. From my readings, much of the legislative detail will be developed and shaped by how states approach healthcare reform.
